Abstract

Driving Forces Behind Mergers and Acquisitions Activity: The Aggregate Economic Activity and the Stock Market By Leonidas V. Tzonis The present thesis, motivated by controversies in the literature investigates a series of empirical issues relating to mergers and acquisitions activity in the UK. More specifically, it seeks answers to the following questions: do mergers come in waves, and is there a significant relationship between the aggregate mergers and acquisitions activity, the business cycle and the stock market, both at aggregate and industrial level? Are the stock market mis-valuation and the market timing ability of manager among the driving forces behind merger waves? The focal point is the UK corporate control market over the last twenty years (1985-2005). The main results emerging from the empirical analysis indicate that there exist three distinctly different types of behaviour (regimes) in the series of mergers and acquisitions numbers, both at aggregate and industrial level. Moreover, the contemporaneous relationship between the mergers and acquisitions activity in the UK with the Stock Market and the aggregate economic activity (Business Cycle), is found to be significant, at aggregate level. Finally, consistent evidence which suggests that stock market mis-valuation and the market timing ability of manager is more likely to drive the corporate control market is provided.